Europe stocks drop on global-growth concerns

LONDON (MarketWatch)—European stocks saw broad-based losses on Tuesday, after the International Monetary Fund cut its global-growth forecast, although resources firms found support as China undertook additional stimulus measures.

Alcatel-Lucent
FR:ALU
dropped 5.1%, as Credit Suisse reiterated its underperform rating on the telecom-equipment firm and said the weak trends from the first half of the year are likely to have continued into third quarter.

Banks also posted some of the biggest losses, with Spain’s Banco Popular Español SA
ES:POP
down 2.7% and Banco Santander SA
SAN, -2.06%
.
SAN, -1.81%
off 2.5%.

“The IMF was basically telling central banks to tailor monetary policy to the requirements of the global economy,” McAlinden said.

“They shouldn’t think that just because interest rates are zero-bound, monetary policy can't get any looser. It was underwriting the [U.S. Federal Reserve’s] aggressive approach and served as a reminder to keep an open mind to how super-loose monetary policy could be,” he added. “Markets are quite doubtful if any of the stimulus measures will be effective.”

The IMF further urged Greece to pay more attention to fiscal structural reforms and the country’s indebtedness, amid austerity negotiations with its international lenders.

Miners bucked the trend and advanced, however, as China moved to support growth in the economy. The People’s Bank of China offered 265 billion yuan ($42.1 billion) via reverse repurchase agreements in an open-market operation to ease tight liquidity conditions in the local banking system. Read Asia Markets.

PBOC Gov. Zhou Xiaochuan said monetary policy must remain flexible and set with a preemptive bias to help counter the weak external environment, according to media reports.

Intraday Data provided by SIX Financial Information and subject to terms of use. Historical and current end-of-day data provided by SIX Financial Information. All quotes are in local exchange time. Real-time last sale data for U.S. stock quotes reflect trades reported through Nasdaq only. Intraday data delayed at least 15 minutes or per exchange requirements.